That’s a wrap? Future of Hollywood Video cast in doubt

PORTLAND, Ore. - Once one of the wealthiest companies in Oregon, Wilsonville-based Hollywood Video’s final scene may be written as many customers discovered Tuesday upon finding a dozen of its stores closed.

Paul Niedergang is one of those customers. He marveled that not long ago - in 2007 - Hollywood Video was at the center of a billion dollar bidding war between Blockbuster and Movie Gallery.

“I’ve been thinking this model was doomed to failure,” he said.

Hollywood Video’s parent company, Movie Gallery Inc., filed for bankruptcy last week and said it will continue to operate while it is in bankruptcy. It said a court in Virginia approved the use of cash on hand for operations.

Hollywood Video isn’t the only video-rental chain in trouble, its chief competitor, Blockbuster is struggling too. Its stock closed at 38 cents a share Tuesday and it plans to close 20 percent of its stores by next year.

With Netflix mailing movies to homes, movies available on iPhones, and Internet-ready televisions providing almost endless entertainment options, the days of going to the corporate video store are becoming rarer. They key to survival may be finding a niche.

Take, for example, Movie Madness in Southeast Portland. It has found success as a movie museum, containing treasures like the actual costume Peter Boyle wore in Young Frankenstein and 50,000 titles of current and older, hard to find, material. A lot of it has yet to be converted to digital.

“It’s going to be decades before it’s available that way, if it’s ever available that way, because a lot of these things have slipped into the public domain,” Perry Horton of Movie Madness said. “A lot of these things have been lost. They were printed one time for video in the 70s and 80s and they just went out of print. Nobody owns the rights to them, so they won’t be reprinted.”

He said Hollywood Video survives mostly on new releases.

Movie Gallery says by closing 760 movie and game stores nationwide, it hopes to find a working business model to keep nearly 2,000 stores open. But this is the second trip through bankruptcy court for the company in just three years.

“As long as Netflix continues to surpass their inventory, I don’t think that you’d see a Blockbuster or Hollywood in the next three or four years,” Horton said.

He said the next big thing on the horizon to watch for is a wave of 3-D movies because of the vast improvements in the technology it takes to produce them.

Hollywood Video and Movie Gallery did not return phone calls seeking comment.   
 
The Associated Press contributed to this report.